TFS Ltd, a retail company selling hotel furniture, has just completed its master budget for the next fiscal year. Ending inventory is budgeted at 20% of cost of goods available for sale. Selected data from that process appear in the table below: TFS' budgeted cost of goods available for sale for the next fiscal year will be

Question

TFS Ltd, a retail company selling hotel furniture, has just completed its master budget for the next fiscal year. Ending inventory is budgeted at 20% of cost of goods available for sale. Selected data from that process appear in the table below:  TFS' budgeted cost of goods available for sale for the next fiscal year will be

Quizplus · Accepted Answer

To calculate the budgeted cost of goods available for sale, we need to divide the budgeted ending inventory by 20% and then multiply the result by 100%. This is because the budgeted ending inventory is 20% of the cost of goods available for sale.

So, budgeted cost of goods available for sale = Budgeted ending inventory / 20% * 100%

Substituting the given data, we get:

Budgeted ending inventory = $7,000 
Budgeted cost of goods available for sale = $7,000 / 20% * 100% 
= $35,000

Therefore, the correct answer is D) $35,000.

TFS Ltd, a Retail Company Selling Hotel Furniture, Has Just